France cuts taxes on bankers to attract Brexit leavers

PARIS: The French government confirmed Wednesday that it planned to cut taxes on high-earning finance sector jobs as part of efforts to make Paris more attractive for firms shifting operations out of London due to Brexit.

The 2018 budget will eliminate the marginal tax rate on salaries of employees in firms not subject to the Value Added Tax (VAT), such as banks and insurance companies, that exceed 152,279 euros ($178,761).

From January 1 the higher 20 percent rate on wages above that level will disappear and the 13 percent rate applied until 2013 will be used.

The government estimates that banks, insurance companies and other financial firms stand to save 140 million euros in 2018, thanks to the change.

London-based financial firms could lose their so-called passporting rights that allow them to operate across Europe depending on the outcome of the talks on Britain’s exit from the European Union, set to take place in 2019.

Many financial firms are looking to open up operations in the eurozone ahead of Brexit to ensure smooth operations regardless of the outcome of the Brexit talks, with Frankfurt, Dublin, Amsterdam and Luxembourg also actively seeking to lure businesses.

The budget, unveiled Wednesday, contained another measure to improve France’s attractiveness for financial firms seeking to relocate to the eurozone, the dropping of a plan to impose a tax on intra-day financial transactions that was set to enter force on January 1.